Machinery breakdown insurance covers sudden, unforeseen internal failures - the kinds of incidents that standard commercial property insurance doesn’t include. It’s designed to protect the engines, motors, electrical systems, and mechanical components that keep your business operating day‑to‑day.

What machinery breakdown insurance typically covers

• Sudden internal failure, including electrical burnout, mechanical breakdown, and operator error 

• Key components, such as engines, motors, compressors, generators, pumps, and production machinery 

• Repair and replacement costs, including parts and labour 

• Expediting expenses, such as express freight or overtime labour to speed up repairs 

• Refrigerant gas replacement for cooling or refrigeration systems 

• Newly acquired machinery, when added within the insurer’s notification period 

• Optional business interruption extensions, helping cover lost income while machinery is out of action

What policies usually require

• Regular maintenance, with proof that machinery is serviced and kept in good working order 

• Accurate sums insured, typically based on the full new replacement cost including installation and freight 

• Prompt notification of any breakdown or newly acquired machinery 

• Awareness of depreciation rules, as some components may be replaced on a depreciated basis

Common exclusions

• Gradual deterioration, rust, corrosion, or wear and tear 

• Damage caused by fire, flood, theft, or external events (covered under property insurance instead) 

• Overloading, misuse, or experimental operation 

• Negligence or lack of maintenance

How claims are typically handled

When machinery fails, the insurer will assess whether the damage was sudden and accidental rather than the result of gradual wear or poor maintenance. You’ll usually need to provide repair quotes, service records, and details of the incident. Depending on the policy, the insurer may cover repair costs, replacement of the machine, or expediting expenses to minimise downtime.

Example scenario:   A refrigeration compressor in a food‑processing facility suffers an internal electrical failure. Machinery breakdown insurance covers the cost of replacing the compressor, the refrigerant gas, and the express freight needed to get the part delivered quickly - helping the business avoid product loss and extended downtime.

As a brokerage, we work with you to understand the machinery your business relies on and match it with the right protection. Whether you operate a workshop, a processing plant, a farm, or a commercial facility, our team helps ensure your equipment is covered against the unexpected.